Vietnam to Hold Benchmark Rate at 9% for December
The State Bank of Vietnam, the country’s central bank, said Monday that it will keep the base interest rate unchanged at 9% per annum in December in a move to stabilize the monetary market.
This is the second consecutive month the central bank decided to maintain the rate steadily, according to a decision signed by the SBV on November 29.
The decision came in after the government’s General Statistics Office said that the country’s consumer price index rose 9.58% from the beginning of this year, much higher than the full-year target of 8%.
The SBV did not mention other major rates, comprising the refinancing rate, the discounting rate and the overnight rate on inter-bank market.
In November, the central bank raised the benchmark interest rate by one %age point to 9% per annum.
Refinancing rate was also increased by one %age point to 9%, with the discounting rate for local banks up to 7% from 6%, while the overnight rate on inter-bank market is adjusted up to 9%, from previous 8%.
As a result, commercial banks have boosted interest rates on both dong-denominated deposits and loans to as high as 13.5% and 18%-20% per annum, respectively. This has hindered local firms to borrow money from banks to funds their production and business.
The Vietnamese government has set out various measures to tame in inflation for the rest of this year, striving to curb the country’s full-year CPI at one-digit figure.
Vietnam’s economy is expected to grow 7.24% in the fourth quarter of this year, resulting in a full-year expansion of 6.7% versus a 5.32% growth last year. (SBV)
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